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Unemployment to skyrocket in Brazil under new retirement reform

Christian Fernsby |
The performance of the Brazilian economy will be terrible, with an average of 450,000 new unemployed people every year, if the Retirement Reform defended by President Jair Bolsonaro is approved.

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If the Congress approves the draft bill that modifies the retirement and pension system, Brazil's Gross Domestic Product (GDP) will decrease 1 percent, according to the researcher Marcelo Manzano, from the Trade Union Research Center on Labor Economics (Cesit), attached to the State University of Campina (Unicamp), in Sao Paulo.

When summarizing his first 100 days in office on Tuesday, Bolsonaro expressed confidence that the Parliament will approve the initiative, which is a priority for his administration.

The main item of the reform, which has been broadly criticized, is the creation of a new pension system based on capitalization, like in Chile, and the establishment of a new minimum age of 65 years for men and 62 years for women (from 60 and 55, respectively, at present) for retirement. According to the extreme right-wing politician, that reform will give the country green light to work on the basis of investors' trust.

Quoted by the website Brasil de Fato, Manzano pointed out that such a premise that the reform, as submitted, will save the economy 'is nonsense' and will have an inverse effect by increasing unemployment and social inequality.

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